Xerox: A sneaky 'innovation' strategy via B2B verticals

What does a trip to Xerox’s European research centre reveal about the company’s future direction?

Deep in the heart of the French countryside, flanked on either side by mountains, sits a beautiful old chateau and shiny dark-glass fronted research centre. In here, teams of brilliant data scientists – along with six anthropologists – are beavering away to push the Xerox brand towards the type of potential it last had in the 1970s.

“Most people in the US probably interact with us every day,” says Craig Saunders, Lab Manager, at the European Research Centre, ruefully. They just don’t know it. “We engineer the way the world works in the background.” In fact, in a weird twist of logic, unlike many of its services, honey from the onsite beehives regularly arrives, bearing the Xerox logo.

These are all fairly recent developments. Since the company acquired ACS in 2009 it has sat firmly at the forefront of the (largely anonymous) BPO space. This means it boasts a wide portfolio of clients across verticals as diverse as healthcare, transportation and HR. “We had a steep learning curve after buying this company,” explains Monica Beltrametti, Chief Services Officer and head of the facility.

Today this appears to demonstrate a multi-pronged approach to driving and owning global data innovation. This goes alongside a concerted step away from its traditional image as a copier company. “We’re challenged by that,” says Saunders. Instead, through its research centres in Canada, France, India and the US, it is striving to come first in the data analytics race.

In some respects this is old territory for Xerox. Back in the glory days of PARC (Palo Alto Research Centre) the company came up with Ethernet and the graphical computer interface. It effectively re-thought the way we work and as Steve Jobs [YouTube video] – who stole the ideas – put it; the company could have owned the whole computer industry. The trouble was the people at the top were thinking like a copier company.

Xerox is determined not to to make that mistake again. Yet many of the wider challenges are exactly the same as they were forty years ago. There is mass global uncertainty about how the technological future will pan out in practice. This in turn has led to a general need to disrupt dominant corporate cultures. The real difference this time round though is that businesses understand that a wave of change is coming, and the majority are working to grab at as many innovative ideas as they can as quickly as possible, in order to seize the future.

‘Big Data’, ‘actionable analytics’ and ‘strategic innovation’ are the biggest buzz words and nobody wants to get left behind. There are a large of number of companies vying for dominance in these arenas. And Xerox thinks it is in with a fighting chance of getting there first.

Saunders believes “diversity” gives his company the edge. Clients in a variety of verticals want a solution and Xerox - with its team of cutting-edge scientific researchers - can work with them to supply it. This means the company gets to work through a range of real-life problems, as they happen. This in turn provides researchers with more fuel for their own studies - these incidentally are contracted to do around 50% of their own work and about 50% on client solutions.

And as Beltrametti pragmatically puts it: “We’re at an advantage having so much data”.

This is a good argument. The last ten years may have thrown up a string of new extremely disruptive companies which have taken the market by storm but the old guard still has a quiet, patient reach. Take IBM’s work in Africa.

Over the last five years IBM has slowly and systematically sought to create new, non-existent data across every social avenue on the continent. It has set up two research centres to facilitate this. And while the information it is gathering may not have a clear price tag at the moment - it certainly will in the future. Every big player may want to make a land grab for African data but nobody else appears to have either the resources or inclination for such a long-term strategy.

Xerox may be attempting something equally back-handed. Because by approaching businesses via B2B verticals – with a spot of strategic innovation chucked in for good measure – it is making a serious play for the global consumer. And its reach is already quite phenomenal.

In transportation it has delivered a total overhaul of the parking situation in downtime LA. This has included new embedded sensors (via a third party) in every parking space and has resulted in a real-time holistic picture of the traffic, with a dynamic pricing model proposed to match. In healthcare it offers numerous solutions, including a “smart” medication system in the US – which must hone straight to the heart of customer data.

Then there is customer service. This forms the virtual face of how we are likely to interact with businesses tomorrow. And Xerox is working to create the ultimate virtual agent. Of course, there is little difference here from the aspirations of other impressive attempts, like Amelia, released by IPsoft last year. Yet the overall picture might be bigger.

Scott Nowson – a Xerox Europe research project leader who is focused on understanding the next generation customer - has spent a decade investigating personality in online interaction. He feels the company could be in an ideal position to run this area. This is “research waiting to be commercialised,” he says. And every business wants deep, personalised engagement with its customers based on individual personalities, not just preferences.

In some ways this is quite terrifying stuff. It enters the whole territory of predictive ‘mind reading’ apps which know what you want before you do. However, it also seems the inevitable next step in artificial intelligence, machine learning and customer care. Nowson suggests that in the future Xerox could even deliver the “single mind reading app” that operates for a number of different companies quietly providing consumers with what they need.

So, what chance does Xerox have of realising its far-reaching ambitions this time round? Unlike in the 70s when research was often dismissed as “experimental”. Today, “innovation” is seen in an extremely positive light.  And there is no real reason why these copier people can’t claim their slice of the pie.

Even with news that stock is falling, this is a big company. It is putting its money into the best researchers. And it has a worldwide client base to test new ideas on. It fact, it could be as equipped as anyone to succeed. But then, in the end, a lot will come down to luck. And whether the most brilliant computer scientists in Europe fancy a spot of outdoor living… and the charm of Xerox branded honey.